The ruling requires Comcast to cease impeding peer-to-peer applications, to tell the FCC how the practice has been used, and to notify customers about other network management practices it adopts in the future.

WASHINGTON
(Reuters) - Comcast Corp has been ordered to change how it manages its
broadband network after U.S. communications regulators concluded some
of its tactics unreasonably restrict Internet users who share movies
and other material.

"Subscribers should be able to go where they want, when they want,
and generally use the Internet in any legal means," FCC Chairman Kevin
Martin said in a statement.

Comcast said it was disappointed by the decision and was considering all its "legal options."

The ruling by the FCC does not include any fines against Comcast.
But it requires the company to cease impeding peer-to-peer
applications, to tell the FCC how the practice has been used, and to
notify customers about other network management practices it adopts in
the future.

The complaint against Comcast was filed by consumer groups who said
the company had blocked file-sharing services, such as BitTorrent, that
distribute TV shows and movies.

The case has become a flash point for a growing debate over a
concept known as "network neutrality," which pits open-Internet
advocates against some Internet service providers, who say they need to
take reasonable steps to manage ever-growing traffic on their networks
for the good of all users.

RETURN TO SENDER

Comcast has said its network management practices were a reasonable
choice and has argued that the FCC does not have the authority to
enforce its open-Internet policy.

Martin likened Comcast's network management to "the post office
opening your mail, deciding they didn't want to bother delivering it,
and hiding that fact by sending it back to you stamped 'address unknown
-- return to sender'."

Martin said the technique ran afoul of the FCC because it was too
sweeping and was not disclosed to customers. He said Comcast's
justification for using it -- that it is needed to manage network
congestion -- did not add up.

Martin said he was especially troubled because the file-sharing
targeted by Comcast was a potential competitive threat to the company's
own video services. He said that if the FCC failed to take action in
the Comcast case, it could provoke lawmakers in Congress to slap even
more explicit rules on broadband providers.

Rival network operators Verizon and AT&T issued statements
immediately after the vote saying the FCC's action showed that there is
no need for Congress to intervene.

"We have argued repeatedly that there is no need for federal
legislation in this area, and today's FCC action proves that point,"
AT&T senior executive vice president Jim Cicconi said in a
statement.

Joining Martin to uphold the complaint were the FCC's two Democratic commissioners, Michael Copps and Jonathan Adelstein.

However, the decision drew sharp dissents from Martin's two fellow
Republicans, Robert McDowell and Deborah Taylor Tate. They said it was
overly intrusive, and worried that it might inhibit broadband providers
from cracking down on illegal content like child pornography and
pirated material.

McDowell and Tate said the agency should have allowed Comcast and
its critics to iron out their dispute without intervention by the
government.

They noted that Comcast had already reached an agreement with
critics to change the way it manages its network and cooperate with
BitTorrent and others.

"For the first time, today our government is choosing regulation
over collaboration when it comes to Internet governance," McDowell
said. "The (FCC) majority has thrust politicians and bureaucrats into
engineering decisions." (Reporting by Peter Kaplan, editing by Tim
Dobbyn)